Morgan Stanley’s Global Oil Strategist Martjin Rats while talking to Bloomberg said oil prices need to drop below $10 to rebalance the market.
The back gold tanked over 65 percent in the first quarter as the coronavirus outbreak brought the global economy to a standstill, leading to demand destruction. Meanwhile, the Saudi-Russia price war further added to bearish pressure around oil.
Key quotes
Whether you model 15 million barrels of demand destruction or 20 or 25, at some point, that doesn’t quite matter so much anymore. We end up with a forecast that basically leads to a filling up of all oil inventory available globally sometime in May or June. The only way to then balance your market is for the price to drop to such low levels that it backs out physical supply.
The price that you would need for people to shut down already producing fields is exceedingly low.
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